PSC Launches Proceeding to Examine Future of Universal Telephone Service

A packed house filled the 19th floor boardroom at the New York State Public Service Commission (“PSC”) on September 16, 2009 as Administrative Law Judges Howard Jack and Eleanor Stein kicked off a new proceeding to examine universal service. See PSC to Revisit Telecom Universal Service Policies. Everyone was there – PULP, Verizon, AT&T, Frontier/Citizens Communications, the state Cable TV Association, Verizon Wireless, T-Mobile, Sprint, the state Consumer Protection Board, the state Library Association, representatives of the independent local exchange carriers (“ILECs”), and at least16 PSC staff members. While the Judges kept the festivities moving along, it became abundantly clear that a quick consensus will not be had as to which universal service issues would be appropriate for discussion or how they should be resolved.

According to the PSC, this case hinges on two related topics – reasonably priced telephone service in high cost areas and assistance for all low income customers around the state to help afford the service. To assist the ILECs in providing service in rural, high cost areas at comparable rates to urban areas, a “Transition Fund” supported by the ILECs has been in place since 2005. The Transition Fund replaced the Access Settlement Pool, which was phased out at that time. Now that the Transition Fund is expected to run out of cash by early 2011, the time has arrived to examine what, if anything, should be done to replace it. If a new high cost fund is created, the questions arise as to which types of providers would pay into the fund and how would contribution amounts be determined. In addition, the Lifeline discount telephone service (as well as E-911 access and the telecommunications relay service for the deaf) is currently supported by local exchange carriers through the Targeted Accessibility Fund (“TAF”). Under the current intermodal environment, with both fixed and nomadic Voice over Internet Protocol (“VoIP”) and wireless providers competing for local telephone customers with the local exchange carriers, the question was asked as to whether the time has come to begin accessing these other types of providers through TAF.

Before these substantive issues raised by the PSC could be addressed, both Verizon and the Cable Television Association claimed that there were procedural infirmities when the case was launched which would need to be rectified. In addition, AT&T sought to include a pet issue – access charge reform – into the list of discussion topics. AT&T and the other wireless providers stated that the rates long distance providers pay to the local exchange carriers to access their networks to begin or terminate calls within the state need to be the same as the lower rates paid for interstate calls. They believe this topic is intertwined with any universal service discussion.

On top of these actions, the parties agreed that before the heavy lifting can begin, there needs to be a thorough accounting of both the Transition Fund and TAF. While parties will be more inclined to wholeheartedly participate if the need for action can be clearly demonstrated, this might have bogged down the process. Fortunately, the Judges agreed and this analysis is expected to completed in about a month.

The procedural challenges and the request to include access charge reform into the agenda for the case may be just noise to delay consideration of the substantive topics. We believe that the important issues which need addressing in the proceeding include:

1. The PSC should adopt a state policy to enroll all eligible customers in Lifeline.
2. The PSC should work with the state Office of Temporary and Disability Assistance (“OTDA”), TAF, and the providers to improve the Lifeline automatic enrollment process in a competitively neutral way. Currently, OTDA partners only with Verizon to confidentially match names of people on various forms of public assistance with the company’s list of Lifeline customers and, due to the substantial number of access lines lost by Verizon, thousands of potential Lifeline customers are missed.
3. The PSC should permit fixed and nomadic VoIP providers to offer Lifeline and allow VoIP and wireless providers to draw from the fund which supports Lifeline.
4. The PSC should ensure that all eligible telecommunications carriers which offer Lifeline assistance to customers do so without regard to the service package they have chosen.
5. In addition to universal service for dial tone, PULP believes that universal access to broadband should be supported by the state’s broadband providers.
   

It will take vigilance by the Judges overseeing the case, and the parties, to ensure the real issues of this proceeding – the future of service in high cost areas in the state and enhancing Lifeline participation – are properly addressed and not avoided by hurdles thrown in the way.

Lou Manuta